This week, Sri Lankan parliamentarians will choose a new leader for the island nation following the unexpected resignation of Gotabaya Rajapaksa. Rajapaksa was overthrown by a storm of political unrest that saw demonstrators occupy his presidential residence.
However, the fight for a new Sri Lanka did not end with the ouster of the country’s strongman. The debate now centers on the contributions that individuals who ran for office made to the transition of the nation, with a particular emphasis on Ranil Wickremesinghe, the acting president and six-term prime minister.
Another instance of a political conflict brought on by a failing economy is the problem on the island in South Asia. The galloping inflation that reached 54.6% in June and the horrifying example of the global food crisis, the galloping inflation of food to 80%, are at the heart of the catastrophe.
Only recently has a political elite fallen victim to faltering economies and, more specifically, widespread rage. There have been many revolutions in recent human history that were sparked by economic hardship and led by people who had run out of patience.
In addition to looking for weapons when Parisians stormed the Bastille in 1789, they were also looking for additional grain to make bread, which is why the uprisings that started the French Revolution were known as the Flour War.
More complex social upheavals and frustrations than the cost of bread contributed to the catastrophe. However, the lack of bread contributed significantly to the crisis’ spread and severity.
The Price Revolution reduced Spain to its knees for around 150 years. The inflation rate was between one and 1.5 percent, which is incredibly low when compared to contemporary data yet was seen excessively high due to the 16th century’s monetary policies. These price “surges” were substantial enough to set off a chain reaction of economic occurrences that changed the course of European history.
Price crises have caused a cascade of consequences that have affected civilization forever, from Europe to the Pacific to SSA. But as a result of the intolerably high cost of living, the entire world is now on the verge of a major disaster.
The benchmark rate has been increased three times this year, back-to-back, by the Federal Open Market Committee (FOMC), the Federal Reserve System’s body responsible for setting interest rates. The inflation rate, meanwhile, is unfazed, setting new records every month and soaring to a level not seen in the previous 40 years.
They increased their point total once again and topped 9% in June. There are theories that the treatment is plateauing, but the robust employment market refutes these theories. Over 370,000 new positions were added to the labor market in the same month, exceeding expectations of experts.
The socioeconomic structure of the UK differs significantly from that of the more vibrant US. However, they currently have a thing in common: rising inflation. Both nations’ economies are currently struggling to contain an inflation rate that has climbed to 9.1%.
Since last year, locals have urged the government to find a novel strategy to freeze prices to provide employees leverage because their real salaries have drastically decreased. The resignation of Boris Johnson did not stop the demonstrations.
Instead, inflation, which is predicted to reach a top of 11% in the year, has emerged as a major talking point in the contest for the office of prime minister. To try to stop the rise in prices, the Bank of England increased the lending rate from almost zero to 1.25 percent.
According to Christine Lagarde, president of the European Central Bank (ECB), the Eurozone is only hoping to escape negative interest rates by the third quarter of the year, while the rest of the world emphasizes the importance of higher interest rates in containing inflation. But the region is paying a high price for its sluggishness with a highly volatile Euro. With the United States closing the gap with it as it continues its fast fall, last week saw the worst trading value in its history.
The 19-member economic bloc’s inflation rate increased from 8.1% to 8.6% in June, driven by the customary energy issue. The ongoing energy crisis affecting the European Union (EU) was brought on by the conflict in Ukraine and the ensuing Western sanctions against Russia. Since last year, energy prices have increased by nearly 40% as the EU seeks to wean itself off of Russian supply.
Asia still has much lower inflation than the United States and Europe do. For instance, the consumer price index (CPI) for China increased by 2.5% from a year earlier. The price change is regarded as reasonable because it is almost a percentage lower than the predicted 3.42 percent global average inflation rate. A two-year high inflation growth rate, however, is far from usual for the Chinese people.
In the past, Japan has not experienced problems with inflation like China did. Instead, as its economic miracle came to an end, sluggish growth and deflation became the main issues. Inflation in Japan averaged about 0.42 percent from 2010 to 2020. Similar to China, Japan experienced a rise in inflation in May, rising to 2.5%, just above the Bank of Japan’s target of 2%.
within that area. In South Korea, where the inflation rate has reached a 24-year high with a 6% year-over-year (YoY) growth, there are increasingly grave worries developing. Energy costs, like in Europe, are the most debilitating of South Koreans’ many price challenges. The Bank of Korea responded by increasing its benchmark interest rate six times since August, bringing it to 2.25 percent.
The World Bank and the International Monetary Fund (IMF) both view the current trends as a setback to growth, despite the fact that African nations are accustomed to high inflation.
One example is that since the commencement of the Russia-Ukraine war, Zimbabwe’s irregular inflation rise has increased from 66% to 191%. According to the International Monetary Fund, its hyperinflation in 2008–2009 was 500 billion percent. Back then, 100 trillion Zimbabwean dollar banknotes were insufficient to cover the cost of staple foods.
Ethiopia’s inflation rate decreased in June for the first time in the previous four months. However, at 34%, it is still a concerning figure trend for the country’s poor residents in East Africa. Headline inflation in Ghana surged to 29.8% in June amid bailout negotiations with the IMF. As the expense of living hits a breaking point around the world, West African citizens have joined their counterparts in Sri Lanka, Albania, Argentina, Panama, and Kenya to call on politicians to take immediate action.
In my country, the inflation rate in June was 18.6%. However, experts contend that the data are manipulated to keep political tension in check and do not accurately reflect market realities. Nigerians have learned to deal with inflation, unlike other countries where it is a recent concern.
However, it is difficult to predict how Nigerians will continue to respond to the difficulties and how long it will take before such protests reach home as inflation-related social unrest grows throughout the world.